Saturday, September 08, 2007

This is probably not the best timing, given the very weak August employment report, but I regard the developments in this article in Wednesday's New York Times as a good sign. Five months ago, I asked the question in the context of the immigration debate, "Is Labor Now the Mobile Factor?" I wrote:

In the current environment, I would expect to see capital going south across the border with Mexico, drawn by the high returns available due to the large amount of low-wage labor. But that's not what we are seeing. We are seeing the labor cross the border--at considerable personal cost--to take the low-wage jobs and then send remittances back to Mexico. (Even in agriculture, where the land is obviously not mobile, I would be surprised if much of the agriculture in the Southwestern U.S. couldn't also be produced in Mexico. But there is nothing in the argument that requires the unskilled labor to work in agriculture or any particular industry.)

The article notes that there are American farmers who are moving their businesses south of the border:

Steve Scaroni, a farmer from California, looked across a luxuriant field of lettuce here in central Mexico and liked what he saw: full-strength crews of Mexican farm workers with no immigration problems.

About 500 people work for Steve Scaroni’s farming operation in Mexico. Farming since he was a teenager, Mr. Scaroni, 50, built a $50 million business growing lettuce and broccoli in the fields of California, relying on the hands of immigrant workers, most of them Mexican and many probably in the United States illegally.

But early last year he began shifting part of his operation to rented fields here. Now some 500 Mexicans tend his crops in Mexico, where they run no risk of deportation.

“I’m as American red-blood as it gets,” Mr. Scaroni said, “but I’m tired of fighting the fight on the immigration issue.”

That's good to know. I consider our "blood" to be the same color for the same reason, and I am also tired of fighting the fight on the immigration issue. I'm tired of hearing people treat American citizenship as if it is incidental to an economic transaction. Stepping up to that task in this article (filling in for the President, I guess) is Senator Dianne Feinstein of California:

She predicted that more American farmers would move to Mexico for the ready work force and lower wages. Ms. Feinstein favored a measure in the failed immigration bill that would have created a new guest worker program for agriculture and a special legal status for illegal immigrant farm workers.

There is nothing so sacred about cheap lettuce that we should create a population of second-class citizens to pick it in California rather than Mexico. So I'm glad Mr. Scaroni has moved his operations to Mexico if he feels that is what is essential for his business if he is to abide by our immigration laws. I am particularly glad that the legal and economic infrastructure has developed in Mexico to the point where he can do it.

I wish him the very best in his endeavor, and I'll reward him like I do all other businessmen--I'll buy his product if it's the best one on the market for the price. The article gives a good accounting of the various business challenges involved, and it's worth a read.

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About Me

I am a Professor of Economics and the Director of the Nelson A. Rockefeller Center at Dartmouth College. I am on the board of Ledyard Financial Group (LFGP) and currently serve on the Census Scientific Advisory Committee. I blog about economics, politics, and current events at http://samwick.blogspot.com. The opinions expressed here, there, and everywhere do not necessarily reflect the views of Dartmouth College or any other institution with which I am affiliated.

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